We provide a preference-based rationale for endogenous overconfidence. Horizon-dependent risk aversion, combined with a … possibility to forget, can generate overconfidence and excessive risk taking in equilibrium. An "anxiety prone" agent, who is more … results to the literature on empirically observed overconfidence and excessive risk taking in several domains of financial and …

A long-standing puzzle is how overconfidence can persist in settings characterized by repeated feedback. This paper … studies managers who participate repeatedly in a high-powered tournament incentive system, learning relative performance each … time. Using reduced form and structural methods we find that: (i) managers make overconfident predictions about future …

that have different degrees of overconfidence. The channel through which the matching occurs is the share of bonus payments … to an assortative matching between overconfident managers and banks with a larger bailout probability. We then test the …